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Kraft lifts outlook amid Cadbury takeover bid

Kraft Foods Inc., engaged in a hostile takeover bid for candy maker Cadbury PLC, boosted its full-year profit outlook for the second time in two months.
/ Source: The Associated Press

Kraft Foods Inc., engaged in a hostile takeover bid for candy maker Cadbury PLC, boosted its full-year profit outlook for the second time in two months after logging strong operating gains, as it spent more on money on its core brands than in the prior year.

The food company, whose products include Maxwell House coffee and its namesake cheese, has continued to reduce its product lines during the economic downturn in order to concentrate on its most profitable products.

Kraft now anticipates 2009 earnings of at least $2 per share, compared with a prior forecast for a profit of at least $1.97 per share. In November, the Northfield, Ill. company increased its guidance to $1.97 from $1.93 per share.

Analysts surveyed by Thomson Reuters, whose estimates generally exclude one-time items, expect full-year earnings of $2 per share, on average.

On Tuesday, Cadbury made its case against Kraft's $16.5 billion bid, saying its annual results would top estimates. The British company also said it will boost dividend payments by 10 percent.

Kraft Chairman and CEO Irene Rosenfeld maintained late Tuesday that the company will still be able to "deliver sustainable top-tier performance, with or without Cadbury." Kraft has held this position since November, when it was still in the process of making a firm offer for Cadbury.

If Kraft does win Cadbury, it would create an industry giant, combining the world's second-largest food maker and one of the world's largest confectioners.